Thursday, February 4, 2016

After attending a Data Visualisation workshop at University of Melbourne this week (Resbaz 2016; D3 Visualisation workshop, plot.ly workshop; Thanks Isabel and Errol), I have tried to plot graphically the FTTN vs FTTP perspectives. See my outputs here from this week's workshops.

Through playing with the model (available on figshare (v5)), the most important variables seemed to be:

The dots are smoothed into colour sections. Blue sections where the assumptions favour FTTN (preferred by the Liberals Party, in conjunction with HFC, some FTTP and other wireless tech for Regions and Remote) and orange sections where the assumptions favour FTTP (preferred by Labor Party). Live version of image, with mouseover datapoints at: Figshare (v5) to download, and Github to view.

at 2% impact on household (HH) GDP ($70k household) then FTTN is highly favourable, even if only short two year delay. The HH GDP annual impact $1,400pa is much larger than around $2,000 difference between FTTN and FTTP capex and dwarfs OPEX and revenue differences.

at 1% impact on HH GDP, a four year delay in FTTP installation is sufficient to favour FTTN over FTTP.

at 0% impact on HH GDP, then FTTP is favourable even with long delays to FTTP. At higher interest rates, then a shorter delay for FTTP is equivalent to FTTN.

In previous cost benefit analyses of NBN, a 0.5 - 1.0% impact on GDP was sufficient to make the NBN NPV positive - ie benefits exceed costs, accounting for time impact of cashflows. At these lower household impacts, FTTP is preferred, but where there are immediate significant household GDP impacts ( ie more than 1%) then FTTN is preferred. Long delays in FTTP encourage more use of FTTN, as do higher interest rates.

NB: outstanding and unaccounted for issues were described in the last post, eg cost of replacing FTTN at the end of its perhaps 10 year life; the excess benefit of FTTP over FTTN, and so on.

Conclusion:
FTTN and FTTP are only as good as the assumptions that assert their case. There are many cases, listed above where FTTN is better than FTTP for GDP over 20 years. Where the NBN impact on household GDP is significant, this prompts an earlier install of FTTN.